Lordstown Motors confirms DOJ investigation into PSPC deal and pre-orders

Ailing electric vehicle start-up Lordstown Motors has confirmed that the Justice Department is investigating its activities, including the PSPC deal that made the company public last year and its reports on vehicle pre-orders.

The confirmation comes two weeks after the federal investigation was first reported by the Wall Street Journal and confirmed to CNBC by someone familiar with the investigation. It follows a Securities and Exchange Commission investigation into the company and public comments made by executives, including its former chief executive officer Steve Burns.

Lordstown Motors said in a Thursday filing that it had “received two subpoenas from the SEC for production of documents and information, including relating to the DiamondPeak and Legacy Lordstown merger and vehicle preorders, and we have been informed by the United States Attorney’s Office for the Southern District of New York that it is investigating these matters. “

The company said it had “cooperated and will continue to cooperate with these and any other regulatory or government investigations and inquiries.”

Burns and his CFO quit the PSPC-backed company following an internal investigation that revealed “issues with the accuracy of certain statements” regarding Lordstown’s pre-orders, particularly the severity of the orders and who they received. was performing.

In May, short seller Hindenburg Research claimed the company had misled investors, including using “bogus” orders to raise capital for its Endurance electric van. The short seller also said the pickup was years away from production. Lordstown maintained that it was on track to start manufacturing the vehicle in September.

Lordstown had previously said the internal investigation revealed that Hindenburg’s report “is in many ways false and misleading”.

Lordstown went public through a Special Purpose Acquisition Company, or SPAC, in October. She is part of a growing group of electric vehicle start-ups going public through deals with PSPCs, which have become a popular way to raise funds on Wall Street because they have a more streamlined regulatory process than deals. traditional public initials.

Correction: The GM’s investigation was first reported two weeks ago. A previous version incorrectly indicated this moment.